This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/global-development/2013/jun/14/fco-aid-finance-system-unfit-purpose
The article has changed 5 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| UK aid watchdog pinpoints flaws in Foreign Office aid finance system | UK aid watchdog pinpoints flaws in Foreign Office aid finance system |
| (about 5 hours later) | |
| The financial management system used by the Foreign and Commonwealth Office (FCO) for handling aid programmes and projects is not fit for purpose, the UK aid watchdog said in a report on Friday. | The financial management system used by the Foreign and Commonwealth Office (FCO) for handling aid programmes and projects is not fit for purpose, the UK aid watchdog said in a report on Friday. |
| Criticism of the FCO's Prism financial management system emerged in an otherwise generally positive assessment of the department's handling of the Arab Partnership Participation Fund (APPF), set up to help countries make the transition to democratic rule after the Arab spring. | Criticism of the FCO's Prism financial management system emerged in an otherwise generally positive assessment of the department's handling of the Arab Partnership Participation Fund (APPF), set up to help countries make the transition to democratic rule after the Arab spring. |
| William Hague, the foreign secretary, announced the formation of the Arab partnership in February 2011 after the fall of the Tunisian and Egyptian governments. It was later expanded into a joint initiative between the FCO and the Department for International Development (DfID). | William Hague, the foreign secretary, announced the formation of the Arab partnership in February 2011 after the fall of the Tunisian and Egyptian governments. It was later expanded into a joint initiative between the FCO and the Department for International Development (DfID). |
| The £40m APPF, managed by the FCO, gives grants mainly to NGOs that support democratic transition. The fund's remit includes electoral processes, institutional reform and media development. The major recipient countries are Algeria, Egypt, Tunisia, Jordan, Morocco and Libya. | The £40m APPF, managed by the FCO, gives grants mainly to NGOs that support democratic transition. The fund's remit includes electoral processes, institutional reform and media development. The major recipient countries are Algeria, Egypt, Tunisia, Jordan, Morocco and Libya. |
| The £70m Arab Partnership Economic Fund (APEF) is managed by DfID, with most of the money channelled through multilateral partners. | The £70m Arab Partnership Economic Fund (APEF) is managed by DfID, with most of the money channelled through multilateral partners. |
| In its report, the Independent Commission for Aid Impact (Icai) gave the APPF an overall rating of green-amber, its second-best ranking after green. | |
| "The APPF has a sound strategy and good delivery capacity, although limited by weaknesses in project management," Icai said. "APPF has demonstrated the potential for impact in a difficult environment. While the FCO has proved adept at learning from operational challenges, it needs to improve the way it measures results." | "The APPF has a sound strategy and good delivery capacity, although limited by weaknesses in project management," Icai said. "APPF has demonstrated the potential for impact in a difficult environment. While the FCO has proved adept at learning from operational challenges, it needs to improve the way it measures results." |
| Icai, however, said APPF's effectiveness has been held back by limitations in the FCO's management systems and capacities. In 2011-12, the FCO managed £271m in official development assistance (ODA), 3.2% of total UK aid. The amount of ODA handled by the FCO is expected to increase under the forthcoming comprehensive spending review. | Icai, however, said APPF's effectiveness has been held back by limitations in the FCO's management systems and capacities. In 2011-12, the FCO managed £271m in official development assistance (ODA), 3.2% of total UK aid. The amount of ODA handled by the FCO is expected to increase under the forthcoming comprehensive spending review. |
| But if it is to play a significant role in Britain's aid programme, the FCO needs to significantly improve its financial management systems,said the watchdog. | But if it is to play a significant role in Britain's aid programme, the FCO needs to significantly improve its financial management systems,said the watchdog. |
| "The Foreign and Commonwealth's financial management system, Prism, is not fit-for-purpose for programme and project management," said ICAI, adding that it should invest more effort into sharing knowledge and experience among partners and country programmes. | "The Foreign and Commonwealth's financial management system, Prism, is not fit-for-purpose for programme and project management," said ICAI, adding that it should invest more effort into sharing knowledge and experience among partners and country programmes. |
| An FCO spokesman said: "We welcome the Icai report and are pleased the report highlights the good work we have done, and are continuing to do, in response to the Arab spring. We note the suggestions for improvement on measurement, financial systems and procedures. We believe our systems are robust and have been working to improve in many of these areas already. We look forward to co-operating with Icai to make further improvements." | An FCO spokesman said: "We welcome the Icai report and are pleased the report highlights the good work we have done, and are continuing to do, in response to the Arab spring. We note the suggestions for improvement on measurement, financial systems and procedures. We believe our systems are robust and have been working to improve in many of these areas already. We look forward to co-operating with Icai to make further improvements." |
| Although the watchdog deems the overall APPF strategy sound, it urges the FCO to introduce explicit "theories of change" into its approaches "to identify clearly what outcomes it hopes to achieve and how, particularly in the good governance area. It should then measure and report on progress towards these outcomes, to produce a clearer picture of overall results". | Although the watchdog deems the overall APPF strategy sound, it urges the FCO to introduce explicit "theories of change" into its approaches "to identify clearly what outcomes it hopes to achieve and how, particularly in the good governance area. It should then measure and report on progress towards these outcomes, to produce a clearer picture of overall results". |
| Icai defines a theory of change as "[a] model which sets out how a planned intervention will work and have the intended impact. The assessment of a programme will typically look at this rationale and undertake work to understand what happened and why, so as to test whether the theory of change underlying the aid project has proved to be valid". | Icai defines a theory of change as "[a] model which sets out how a planned intervention will work and have the intended impact. The assessment of a programme will typically look at this rationale and undertake work to understand what happened and why, so as to test whether the theory of change underlying the aid project has proved to be valid". |
| Such models are particularly important in governance, said Icai. | Such models are particularly important in governance, said Icai. |
| "At present, it is not clear how a portfolio of small-scale activities can contribute to institutional and policy changes on the scale required in transition countries. It is also not clear what APPF's distinct role might be in the anti-corruption field," said the report. | "At present, it is not clear how a portfolio of small-scale activities can contribute to institutional and policy changes on the scale required in transition countries. It is also not clear what APPF's distinct role might be in the anti-corruption field," said the report. |
| Tunisia, which has 21 projects drawing on £3.8m in FCO funding, emerged as APPF's most successful country programme. APPF support helped to ensure that the first election was free and fair, and also helped to prepare legislation on press freedom and develop the legal framework for a new anti-corruption commission. Egypt (16 projects costing £3.3m), where the government has cracked down on NGOs, has been more problematic. | Tunisia, which has 21 projects drawing on £3.8m in FCO funding, emerged as APPF's most successful country programme. APPF support helped to ensure that the first election was free and fair, and also helped to prepare legislation on press freedom and develop the legal framework for a new anti-corruption commission. Egypt (16 projects costing £3.3m), where the government has cracked down on NGOs, has been more problematic. |
| "The Egyptian programme has had a higher failure rate of projects, with a number discontinued in the second year," said Icai. "We nonetheless conclude that the prospects for sustainable impact in Egypt are yet to be demonstrated. The programme will need to continue to seek out new entry points and opportunities." | "The Egyptian programme has had a higher failure rate of projects, with a number discontinued in the second year," said Icai. "We nonetheless conclude that the prospects for sustainable impact in Egypt are yet to be demonstrated. The programme will need to continue to seek out new entry points and opportunities." |
| On the British Council's role after the Arab spring, the watchdog said its response was "considered, strategic and a good complement to the Foreign Office's". | On the British Council's role after the Arab spring, the watchdog said its response was "considered, strategic and a good complement to the Foreign Office's". |
| "It has a strong delivery model based on good local partnerships and it engages well with beneficiaries," said Icai. | "It has a strong delivery model based on good local partnerships and it engages well with beneficiaries," said Icai. |